Asked Oct 7, 2019

Thelma and Louie, Inc. started the year with a balance of retained earnings of $545 million and ended the year with retained earnings of $590 million. The company paid dividends of $35 million to the preferred stockholders and $75 million to common stockholders.


Calculate Thelma and Louie’s net income for the year.


Expert Answer

Step 1

O = Opening balance = $ 545 mn

C = Closing balance = $ 590 mn

Total dividends paid = $35 million to the preferred stockholders + $75 million to common stockholders = $ 110 mn

Let NI be the net income during the year.

Step 2

Connecting equation is:

O + NI - D = C

Hence, NI = C + ...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in



Financial Statement Analysis

Related Finance Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: You expect to receive $25,000 at graduation in two years. You plan on investing it at 9 percent unti...

A: Let's say we have to wait for n years once you get the money at graduation, which itself is two year...


Q: Suppose Omni Consumer Products's CFO is evaluating a project with the following cash inflows. She do...

A: Part 1:Payback Period = 2.5 yearsCalculation of Initial Investment:


Q: How long would it take an investment to double under each of the following conditions? (a) Interest ...

A: (a)Interest Rate = 3.3%Type of Compounding = MonthlyNumber of Compounding = 12 Assumption:Present Va...


Q: How much annual income would need to be generated over a 5 year period, to be equivalent to $4,000 o...

A: Calculate the annual income over a period of 5 years as follows:MS-Excel --> Formulas --> Fina...


Q: An Iowa state savings bond can be converted to $100 at maturity 22 years from purchase. If the state...

A: Calculation of bond price:The price at which the state can sell its bond is at $18.39.Excel spread s...


Q: Management, the board of directors and creditors are working to avoid a bankruptcy situation for a f...

A: Short-term restructuring is important when the company believes the present situation is temporary a...


Q: Assume that you manage a risky portfolio with an expected rate of return of 14% and a standard devia...

A: a.Calculation of Proportion y:The Proportion y is 87.50%.


Q: Finance Question

A: Calculation of NPV when Susan has purchased a Pharmacy.Calculation of present value using Excel:Note...


Q: Describe post sales service arrangements the firm does or should provide

A: After sale services help the companies achieve customer satisfaction and retain their customers. The...